Trustees of New York City District Council of Carpenters Pension v. Access Solutions Group, LLC

United States District Court, S.D. New York

November 13, 2017

TRUSTEES OF THE NEW YORK CITY DISTRICT COUNCIL OF CARPENTERS PENSION, WELFARE, ANNUITY, AND APPRENTICESHIP, JOURNEYMAN RETRAINING, EDUCATIONAL AND INDUSTRY FUNDS, et al., Plaintiffs,v.ACCESS SOLUTIONS GROUP, LLC, Defendant.

OPINION & ORDER

WILLIAM H. PAULEY III, UNITED STATES DISTRICT JUDGE

Plaintiffs,
employer and employee trustees of benefit funds (the
“Funds”) for individuals covered by the New York
City District Council of Carpenters (the
“Union”), move for a default judgment against
Access Solutions Group, LLC (“Access”). For the
reasons that follow, the Funds' motion is granted.

BACKGROUND

This is
an ERISA action seeking contribution payments that
Access's alleged predecessor, Sukhmany Construction, Inc.
(“Sukhmany”), failed to pay pursuant to a
collective bargaining agreement (“CBA”) with the
Union. When an audit revealed Sukhmany's delinquent
contributions, the Funds commenced an arbitration against
Sukhmany. (Complaint (“Compl.”), ECF No. 1, at
¶ 11-12.) The Funds subsequently obtained an arbitration
award, which was confirmed and entered as a judgment against
Sukhmany in the amount of $215, 992.33 (the “Sukhmany
Judgment”). (Compl. ¶¶ 12-15.)

Thereafter,
the Funds sought to enforce the Sukhmany Judgment. During
that process, they discovered that Access was Sukhmany's
alter-ego or successor. Both companies are owned and operated
by Sandeep Boparai and Sunny Singh and share a common
telephone number. (Compl. ¶¶ 16-17, 19-22.) Both
entities also served a common business purpose-to perform
scaffolding, sidewalk shed, hoist, and elevator work covered
by the CBA's jurisdiction. (Compl. ¶¶ 17-18,
23, 29.)

On the
heels of this discovery, in June 2017, the Funds initiated
this action to recover the amounts owed under the Sukhmany
Judgment, compel Access to submit its books and records for
an audit, and to recover any additional contribution balances
due during and as a result of such audit. (Compl.
¶¶ 30-41.) On June 23, 2017, the Funds effected
service of their complaint on Access. (ECF No. 7.) On
September 8, 2017, the Funds appeared before this Court for
an initial pretrial and pre-motion conference regarding their
request to file a motion for default judgment. At that
conference, this Court established a briefing schedule on the
Funds' motion for default judgment, and provided
Access-which failed to appear-an opportunity to file an
opposition. (ECF No. 12.) On September 11, 2017, the Funds
obtained a certificate of default from the Clerk of Court.
(ECF No. 13.) On October 6, 2017, the Funds filed their
motion for default judgment. Access did not file any
opposition and has not appeared in this action.

DISCUSSION

I.
Standard

Federal
Rule of Civil Procedure 55 establishes a two-step process to
enter default judgments. First, the Clerk of Court must enter
the absent party's default. (See ECF No. 13.)
Second, the non-defaulting party must move for a default
judgment. A default is an admission of all well-pleaded
allegations in the complaint, except those regarding damages.
Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty
Corp., 973 F.2d 155, 158 (2d Cir. 1992). “A
default also effectively constitutes an admission that the
damages were proximately caused by the defaulting party's
conduct: that is, the acts pleaded in a complaint violated
the laws upon which a claim is based and caused injuries as
alleged.” Trs. of Empire State Carpenters Annuity,
Apprenticeship, Labor-Mgmt. Co-op., Pension and Welfare
Funds, 2015 WL 1221500, at *3 (E.D.N.Y. Mar. 9, 2015).

II.
Joint and Several Liability-Alter Ego Relationship

The
Funds seek a finding that Access is the alter ego or
successor to Sukhmany so they can enforce the Sukhmany
Judgment against Access. Of course, if Access is found to be
an alter ego or successor to Sukhmany, such a finding will
also allow the Fund to audit Access's books and records
and determine whether additional contributions should be
remitted.

Joint
and several liability may exist under two different theories.
Under the single employer doctrine, a CBA binding one
employer may be enforced against a non-signatory employer if
(1) the two employers constitute a “single
employer” and (2) the employees of the companies
constitute a single appropriate bargaining unit. See
Brown v. Sandimo Materials, 250 F.3d 120, 128 n.2 (2d
Cir. 2001). “Separate companies are considered a single
employer if they are part of a single integrated
enterprise.” Lihli Fashions Corp. v. NLRB, 80
F.3d 743, 747 (2d Cir. 1996).

The
second theory, the alter ego doctrine, “while having
the same binding effect on a non-signatory as the single
employer/single unit doctrine, is conceptually
distinct.” Truck Drivers Local Union No. 807 v.
Reg'l Import & Export Trucking Co., 944 F.2d
1037, 1046 (2d Cir. 1991). “The purpose of the alter
ego doctrine in the ERISA context is to prevent an employer
from evading its obligations under the labor laws through a
sham transaction or technical change in operations.”
Ret. Plan of UNITE HERE Nat'l Ret. Fund v. Kombassan
Holding A.S., 629 F.3d 282, 288 (2d Cir. 2010) (internal
quotation marks and citations omitted). “To protect
employee benefits, courts observe a general federal policy of
piercing the corporate veil when necessary.”
Kombassan Holding, 629 F.3d at 288. The Funds
advance this theory in support of their argument that Access
is an alter ego or successor to Sukhmany.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Courts
should consider a number of factors in assessing whether
alter ego status exists: &ldquo;whether the two enterprises
have substantially identical management, business purpose,
operation, equipment, customers, supervision, and
ownership.&rdquo; Goodman Piping Prods, Inc. v.
NLRB, 741 F.2d 10, 11 (2d Cir. 1984). Additionally,
“[a]lthough the alter ego doctrine is primarily applied
in situations involving successor companies, where the
successor is merely a disguised continuance of the old
employer, it also applies to situations where ...

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